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Several companies are building feature-specific set-top boxes that allow access to Web video, movie downloads and other services, but Entone Inc. is preparing an all-in-one product that aims to make those devices obsolete.

A $14.5 million Series B funding round led by new investor Coral Capital Management with participation from existing investors Menlo Ventures and Scale Venture Partners will be used in part to complete development of the new product.

"We're working on the next generation of services that will really take IPTV (Internet protocol television) to the next level," Chief Executive Steve McKay said.

San Mateo, Calif.-based Entone's flagship product, the Hydra IP Video Gateway, eliminates the need for set-top boxes and new home wiring to deliver IPTV services. The next-generation media hub products will integrate advanced services such as Web-based video, personal content such as photo libraries, and enhanced viewing capabilities such as whole-home DVR and place shifting.

"This is the ability to not only watch TV, but also access my library of NetFlix, take my television preferences on the go, and share pictures or any media on any IP-connected device in the home," McKay said.

In August 2006, Entone Technologies Inc. agreed to sell its video networking software business and other assets to Harmonic Inc. for $45 million. Investors Menlo Ventures and BA Venture Partners, now known as Scale Venture Partners, provided an exit for that part of the business. Those two firms came back last year for a $12 million Series A to spin out the business with a focus on IPTV.

McKay said that since then the company has seen a 500% increase in its customer base.

"The business has done really well in the last 18 months," McKay said. "We have grown considerably by any metric: customers, revenue or number of units deployed."

McKay declined to provide specific revenue figures or a valuation. He said he expects profitability in 12 months.

Scale Managing Director Jim Jones said the company experienced significant revenue growth in 2007 and expects to double that revenue this year.

"I can see this company with a lot of runway ahead of it in terms of growth," Jones said.

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